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Company Structure, Control Systems, and Strategy
The innovative culture of 3M and their strategy helped to shape the structure of the
organization. 3M’s corporate strategy and culture have been factors in the company’s initial
success and continue to be the reasons why the company has been able to maintain success.
Having such a corporate culture and strategy that encourages such innovation has allowed for
reward and recognition programs and the creation of their seven pillars of innovation.
The root of 3M’s culture of entrepreneurship and innovation and risk taking helped to
establish several reward and recognition programs. The Carton Society award honors employees
for outstanding career scientific achievements, the Circle of Technical Excellences and
Innovation award recognized exceptional technical capabilities. Richard Drew and William
McKnight were two of the key leaders that encouraged and inspired a company culture of
innovation. To encourage their technical staff to learn more about the business portion of the
business they created a duel career track. The duel career track opened up the opportunity for
their techs to have the ability to choose between remaining on the technical side or move into
management with equal advancement.
The key tenets of 3M’s innovation culture that emerged over time were their seven pillars
of innovation, (Arndt, 2006). The VP of research Larry Wendling calls their innovative focus
“The Seven Habits of Highly Innovative Corporation.” From the CEO to the line staff employees
must be committed to innovation. The corporate culture has to be maintained by hiring the best
people and allow them to do their job in their own way. Innovation is impossible without a
broad base of technology. Companies that remain one dimensional will typically run out of ideas
after their first success. Communication is a key factor. 3M’s management team encourages
formal and informal networking with peers. 3M also encouraged employees to set individual
expectations and rewards other employees for outstanding work. Management encourages
quality efforts by talking how much of its revenue comes from products introduce in the past
couple of years, this allowed the company to judge if the research and development money
brought a return on investment. Most importantly, research must be tied to the customer.
The dream day idea allowed employees 15 percent of their time was created 3M’s core
belief than creativity needs freedom. 3M turned this initiative into innovation, which was their
secret ingredient to more than 100 years of innovative success. Even if the employee’s ideas or t
project was not a success it is viewed as a learning lesson.
The Genesis Grant equals time plus funds. Twice a year several of 3 M’s most interesting
ideas will receive this grant along with seed money for additional research. The entrepreneurial
spirit and cultural of innovation is geared towards inspiring today’s giants. 3M has been an
innovative powerhouse for year using their unique approach to encourage a culture that is driven
by creative exchange.
The innovative framework established by Sampair and Patterson created an
entrepreneurial organizational. By following their philosophies of getting in early, hiring talented
and local employees, becoming a good corporate citizen of the country, growing the local
economy, tailor fitting their products, and enforcing patents in local countries they were able to
be successful. From 1951 to 1979 they were able increase their international sales from 5% to
The company decentralized in the 1948 which created some problems for the research
and development division. R & D’s resources were spread across varying projects. In order to
improve the success of projects that yielded higher success rate the Pacing Plus Program was
developed. This program focused on the top 25 product innovation ideas that would receive 20%
of 3M’s research funding. The culture of innovation and entrepreneurial spirit was fostered. The
successes of the international markets also lead to organizational growth. The Pathfinder
Program was created to encourage the innovation of new products and new business for those
born outside of the United States. This lead to a large amount of innovation that earned 3M a lot
of money, such as in 1983 the company had over $150 million in sales from the initiative.
Overall, it is clear that 3M is a company that highly values innovation and has been able
to create a culture and structure that supports their strategy of continual innovation. As 3M looks
to expand their business and products they might use a variety of strategies at both the corporate
and division level to develop the company. The leaders of 3M will have to make some decisions
when it comes to their corporate level strategy. Options for 3M include using related or unrelated
diversification, critical analyzing their criteria for the possibility of a new CEO, or looking into
new ways to market 3M. 3M had a clear culture clash when a production based CEO managed
the organization (Hill, 2013). Coming from the production side he did not have a clear
understanding or fit with the Research and Development side of the organization. As noted this
caused great push back from employees and is believed to have caused a downturn in
productivity and innovation.
Even though production and R&D are a separate part of the organization, one
recommendation would be for 3M management to create a cross training or shadowing program
for its employees. It would be beneficial for each side of the organization to have an
understanding of the other and to have a sense of the culture. While each side is inherently
different they both need to operate as one unit for the mission of organizational success. This
program could increase innovation by brining knowledge and experience of the production
employees to assist with new ideas or more productive ways of creating products. Many
organizations have made use of employee knowledge to inspire or create new products outside of
the R&D departments. For example many of Domino’s Pizza famous items such as their cheese
bread and numerous desserts were invented and inspired by regular employees working in the
Dominos store, even their signature vehicle sign was created by an average employee (Dominos,
2014). While scientists and researchers are a valuable asset to any organization, as proven by
3M’s success they must also look into other areas of the organization to be new and innovative.
Another recommendation would be for 3M to increase innovation and customer
responsiveness would be to invest in a system to better obtain customer feedback. The case
study discusses how 3M uses sales and research in order to establish products and goods which
are successful and how to appropriately package and promote their items but it does not discuss
the use of actual individual customer feedback (Hill, 2013). R&D should frequently survey or
reach out to consumers to gain ideas into what their customer base may be looking for or what
potential customers would like. Using technology such as the Internet has proven successful to
many organizations to use customer feedback to create new and successful products. Getting
customers involved in the creation and improvement of a product not only ensures that you are
producing a profitable product but it also build customer stake in the organization and increases
customer loyalty (Zhelva, 2014). Such a large percentage of organizations are investing in this
strategy that many customer groups prefer organization which are active in obtaining feedback
and look for this quality when doing business (Zhelva, 2014). This is a valuable resource which
3M needs to make use of in order to maintain a competitive stance.
Due to the fact that diversification is a complex strategy 3M will need to analyze what
type of diversification would be the most successful with the company culture and strategy. 3M
would need to analyze the advantages and disadvantages of entering into a joint venture or
possibly acquiring a new company. As seen from the history of 3M, the company has been
successful internationally and has a culture where innovation is promoted. However, the
company has had problems in the past when they acquired new companies, so the leaders of 3m
need to look into other ways to improve the company.
Taking into consideration the history of 3M and their current company strategy and
culture, a strategic recommendation would be for the company to create standard policies and
procedures for funding. By creating a new strategy for funding new innovation at the company
this would help to continue the culture of innovation that 3M is known for. The company will
also be able to more efficiently track and manage their capitol by creating more standard
processes and procedures.

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